Questar STR Dividend Machine for 11/8/2012 Are utilities still a good income investment?

Questar is a gas utility that serves
the Rocky Mountains and Questar is the first dividend machine I found
today. The most recent trade was $19.37
which makes STR a very affordable dividend machine for investors. STR also fulfills the needs of investors who
want an energy play that concentrates on gas.

Questar will pay a quarterly
dividend of $.17 on December 10, 2012 if you own it by November 14, 2012; that
is an annual yield of 3.51%. Questar has
raised the dividend every year for 32 years and sports a D/E ratio of 1.31
which is greater than 1 but within reason for a utility.

You can review the dividend machine
data including most recent earnings per share and dividend history in the table
below.

DIVIDEND MACHINE

11/5/2012

Questar

STR

Price when profiled

$19.37

Last 4 Qtrs Earnings

$2.81

Last 4 Qtrs Dividends

$0.67

Current Qtr Dividend

$0.17

Annualized Div Yield

3.51%

No. Years Div Increase

32

Debt/Equity ratio

1.31%

As you know, my dividend machine
project is based on very specific criteria that I stick with no matter what. I invest in many but not all of the companies
I profile. I already own a lot of
utilities, as do many income investors.
Because of the tax law changes that are looming on dividend income,
investors who own dividend stocks in non-retirement accounts may have to think
twice about this strategy. For those who
invest for income using qualified retirement plans, the tax changes may … I
reinforce … may cause stock price reductions on utilities and in this we find
bargains. Please remember that trying
to time any market is fools play. However,
I do like utilities for part of any income investing portfolio and moving into
utilities that embrace the technology and energy sources that are considered
safe and abundant may make Questar a good fit for those building the income
producing portion of their portfolio.

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Covered Call Opportunities

Square, symbol SQ, is my current favorite stock that is not a dividend machine. To turn it into an income investment, I use SQ's volatiity to buy when it dips and sell calls. See the table above. Note that this call is not included in the post published on 12/12/18 M*

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TheMoneyMadam's Story

My income investing success came from my experience managing my and other people's money since 1993. Successful income investing requires discipline. In this blog I provide specific investments based on my principles of conservative income investing. I hope to help the thousands or even millions of people who have saved and want to invest their nest eggs to retire with income that grows. M* MoneyMadam

Disclaimer

Information on this blog does not constitute investment advice. Review or mention of any stock, bond, or other investment shall not be considered a buy or sell recommendation. Everything in this blog is the opinion of the author and no warranties are expressed or implied. M*MoneyMadam.